Emirates airline profits up 34% to Dh3.1 billion

Dubai: Emirates Group reported its 25th year of consecutive profits as its net profits jumped 34 per cent to Dh3.1 billion ($845 million) last year (2012-13), on Dh77.5 billion ($21.1 billion) revenues - an increase of 17 per cent over last year’s results.

Emirates Group, which includes Emirates airline and dnata — its ground handling and ticketing arm — reported a healthy cash balance which grew by 53 per cent reaching a solid Dh27.0 billion ($7.3 billion).

“Achieving our 25th consecutive year of profit in a financial year with our largest ever increase in capacity across the network is an achievement that speaks to the strength of our brands and our leadership,” said Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and Chief Executive of Emirates airline and Group.

“Throughout the 2012-13 financial year the Group has collectively invested over Dh13.8 billion ($3.8 billion) in new aircraft, products, services and handling facilities as well as the newly opened JW Marriott Marquis Hotel in Dubai. This investment has resulted in an increased customer base and a rise in global brand awareness. Every dirham that we earn is strategically placed back into our business and it is this tenacious approach that has allowed the Group to maintain such strong and consistent profitability under challenging circumstances.”

Despite a difficult operating environment, the Group continued to invest in and expand on its employee base, increasing its overall staff count by 12 per cent to 68,000.

Saj Ahmad, Chief Analyst with the UK-based Strategic Aero Research, said, “In 2012 alone, they launched 15 new routes, and they are targeting some 180 destinations by 2020 - and when you look at just how aggressive their expansion has been, particularly via the traffic stats at Dubai International Airport, Emirates is well on the way to achieving its long-term goals.”

Emirates airline reported profits of Dh2.3 billion ($622 million), by carrying 39 million passengers last year, while dnata made Dh819 million ($223 million) net profits.

Emirates continued with its growth plan and during the financial year saw the largest increase in capacity in the airline’s history receiving a staggering 34 new aircraft, the highest in any single year and an unprecedented achievement. These aircraft were funded by raising more than $7.8 billion, also a first, through a variety of financing structures. Overall capacity measured in Available Tonne Kilometres (ATKMs) increased by 5.5 billion tonne-kilometres.

Other significant capacity increases include launching 10 new destinations across six continents, shipping more than 2 million tonnes of cargo for the first time and carrying an additional 5.4 million passengers over last year, the highest increase in a financial year.

In the 2012-13 financial year, Emirates’ fuel bill increased by 15 per cent over last year to reach Dh27.9 billion. With total operating costs increasing by 16 per cent compared to a revenue increase of 17 per cent over last year.

Emirates raised more than Dh28.6 billion ($7.8 billion) in new funding mainly to secure its on-going fleet expansion, a record amount for the airline. This included $587.5 million financing for additional A380s with a bond that used the debt capital market in the US, a first for a non-US airline in years. Emirates also issued a 10-year amortised sukuk for $1 billion and raised $750 million with a 12-year amortised bond matched to the payment cycle for the aircraft. It further includes more than Dh20 billion ($5.4 billion) raised through finance and operating leases.

Emirates’ revenue reached a record high of Dh73.1 billion ($19.9 billion) growing by 17 per cent when compared to the 2011-12 financial year. Although the average price of jet fuel did not increase over last year, it remains high and has impacted Emirates’ bottom line with the airline’s profit at Dh2.3 billion ($622 million) representing an increase of 52 per cent over last year’s results.